The English Wiz International Marketing - Case Study Example

International Marketing Assignment 2 Name: Joel Macdonald Student # 22113444 Course: International Marketing Due Date: 13.05.2011 Executive Summary The English Wiz is a language Software developed in Australia and it is to be marketed in China. In recent years, China has fast developed into the emerging global economic powerhouse. Since joining the World Trade Organization, China has welcomed and supported technological development initiatives including in the Education sector in which students need to train in both local and foreign languages. Because of these needs, China has since strengthened its legal mechanisms and streamlined its Intellectual property (IP) laws together with Trade Related International Property Systems to harmonize them with WTO provisions (Hai, 2000). The English Wiz is unique language education software and is expected to establish itself within the Chinese market. The is an increasing market for language education following China’s fast economic growth and globalization that has created high need for foreign language skills by both students and professional employees (NDRC, 2011). In the Education sector, some segments such as those associated with language development (language training and language technologies) have been termed “non-core” hence are not quite restricted and controlled by the Chinese government. This is an important advantage for market access and entry by the English Wiz (Torrens, 2010). Introduction The Australian developed English Wiz is only one of its kind and an English language software that has been tailored to aid senior secondary learners sharpen their English writing and grammar skills. This software is to be marketed in the Chinese market. In the past few decades, China’s economy has tremendously grown to become one of the worlds largest. Ever since 1993, China’s number of foreign direct investments has remained high putting China in the second best position every year (Chen, 2001). Having the world’s largest pool of skilled labour, coupled with the highly untapped rural labour resource, China presents one of the best foreign investment opportunities to be tapped. It is because of the fast growing rate of China that has earned her the “economic powerhouse” title (Chen, 2001). For this reason, we target to market our English Wiz in China so as to tap into the enormous market potential. Target Market Since joining WTO and opening up to foreign participation in many sectors, China has recorded tremendous economic growth rates which have necessitated multilingual employees in various sectors (Hai, 2000). Subsequently therefore, this has increased the need for training Chinese citizens to undertake language training. English language is one such language that is highly pursued in China for its significance in areas including; politics, education, entertainment, business, and technical research (Hai, 2000). The target market for the English Wiz software in China will comprise of Chinese secondary schools which are also referred to as middle schools. The middle schools consist of the junior middle school (ages 13-15) compulsory, and the senior middle school (ages 16-18) (China Ministry of Education, 2011). Our market segment target will include both the regular and vocational middle schools country wide. However, the marketing strategy will first cover major cities of China before spreading to rural populations. Some of the major cities include; Shanghai, Beijing, Dalian, Hangzhou, Shenyang, and Guangzhou among others (Torrens, 2010). Specifically, the English Wiz software product is intended to assist all the students (both local and foreign) in Chinese middle schools, who undertake English-taught programs. By the year 2007, China had a total of 14832 secondary vocational and technical institutions, and a total of 22322 private training institutions. Today, China has an estimated 400 million students enrolled in secondary education. China has about 30000 Organizations offering private English classes and the market has grown to an estimated $3.1 billion between 2005 and 2010 (Guardian UK “Battle intensifies for $2bn English-teaching business in China”, 2010) Positioning Strategy A major proactive motivation to market English Wiz in China derives from fact that the English Wiz language Software is a unique product. English Wiz is packaged into a all-in-one application with a user-friendly interface. The application has three levels of education and covers all the various elements of learning a foreign language; reading, writing, listening, speaking, and assessment. This type of product has a potentially profitable upside considering the fast growing Chinese economy characterized by the massive and relatively cheaper labour resource alongside a large potential consumer base. The Chinese have been known traditionally to possess strong memorizing and reading skills. However, they are also known to be comparatively weak in writing and conversational skills (China Ministry of Education, 2011). The English Wiz will be positioned as a unique product as an all-in-one application for secondary (middle) school students to learn and execute all the elements required to perfect the English language. Since China’s demand for English is growing especially in the current globalized nature of business, English Wiz will also be a great tool for Chinese people to learn the English language with a simple touch on their Iphone and/or Ipad. This is very important, as the culture of the Chinese people is characterized by strong national pride, importance for education and value familiarity (Torrens, 2010). Due to the nature of the China market and its business culture, English Wiz will explore ways of either partnering with a Chinese educational institution, or entering into joint ventures with the aim to overcome market access restrictions while establishing good relations with the local firms (Culpan, 1993). Through strategic alliances, it will be easier to access and develop the market ideas and share localised market-based information. This will also allow for sharing of technological and product development costs hence increasing competitive advantage (Khanna, 2010). Therefore there is need to identify the right partner who will present suitable complementary benefits. However, any partnership agreement will be based on adequate provisions for contingencies so that the marketing framework can be flexible enough to suit any changes in the market. Product Strategy English Wiz will be marketed effectively to build a strong brand image in the Chinese market. This will be done through strategic promotion and advertising that will help identify the product with local consumer needs of quality and value service that is affordable. However, during the early stages of introduction, English Wiz will utilize adaptation product decisions because there is a need to adapt completely so that the product can suit the local Chinese market requirements hence facilitate acceptance. This is important although it may not lead to exploitation of the global economies of scale. With time, English Wiz will develop a strong brand image which when exploited, will reduce the need for adaptation thus allowing for global economies of scale (Khanna, 2010). China has great potential for the English Wiz because the market demand to study English is driven by need to improve career prospects through enhanced competitiveness of both students and professionals. Another important market driver is the underlying desire to learn effective communication in the globalized community. Unlike most language technologies in China that focus on speech training and automatic translation, English Wiz is aimed at enhancing every element required to speak the English language. This distinguishing feature serves to reduce competition against English Wiz in the Chinese market (China Ministry of Education, 2011). English Wiz will put in place a functional and internationally representative product development team to help market the Software. In order to do this, English Wiz will be tailored to suit customer needs such that a strong brand image can be achieved. The Company will deploy Research and Development (R&D) strategies through building consortia to enhance cooperation in advancing new products and technologies (Madhok, 1997). English Wiz will be launched in a tactical approach that will involve the country managers as a way of generating attention to the value attached to the product. Before the launch, adequate considerations will be made regarding localisation requirements. English Wiz will deploy a product development framework that will promote testing for performance and evaluate the general status of customer acceptance for the Software product after its launch (Madhok, 1997). There are many English training and educational programs in the China market although many of them are not of high quality (Industry Canada 2007). Because of this, English Wiz will aim to provide a standard and high quality training framework for schools. It will create modern study curricula and course material. English Wiz will explore possibilities of offering consultancy services to students, professionals and government institutions especially with regard to meeting English requirements for international appointments. English Wiz will also consider a web-based training for the Chinese market since it has emerged to be one of the most popular factors in China’s education sector. China supports technological development and a fairly large number of the population (over 100 million people) use the Internet (China today.com, 2011). The immediate challenge however would be the inadequate infrastructure and the wide disparity in population distribution where about 70% of China’s population reside in the countryside (Torrens, 2010). The lack of direct involvement/participation by the learner makes it difficult to assess the learner’s progress since there is no immediate and observed feedback as would be in cases of class room training. However, English Wiz provides language training software to be used at home, which may even be a relatively cheaper option compared to online training programs (Khanna, 2010). The competitive players in the English training market in China include; the state owned Shanghai FESCO International Training Centre, which is an authorised user of World Expo English Accreditation program, New Oriental School, Shanghai Foreign Language University and Wall Street English. Apart from these, the Northern Consortium UK (NCUK) which is made up of 11 British Universities do provide both secondary and undergraduate courses in China. Most English training institutions present in China’s market are of U.S, U.K, and Canadian origin. It is important therefore that any investor interested in provision of English training programs pursue differentiation strategies including; value addition, course content, methodology and marketing techniques (Madhok, 1997). Price Strategy English Wiz will make use of strategic pricing decisions depending on the market segment. For instance, the low to medium Chinese households and other individuals who do not know much about the language industry are more sensitive to prices and program brandings. For such groups, the parents do not use English hence it matters less to them what their children’s English quality is. The medium-high to high-income groups on the other hand are usually more concerned with issues to do with the programs’ quality and the price-value ratio (Torrens, 2010). Some individuals prefer to sample and get convinced regarding service value and quality before making decisions regarding their choices. The choices and preferences are guided by their individual needs and are made with reference to whether the institution is a joint venture, foreign owned business or domestic. Some individuals would thus prefer accessing an initial free trial so that they can assess the quality of service before they start to buy (Torrens, 2010). English Wiz marketing will consider the most important choice determinants which include; Branding (image and reputation), Quality of instructors, price-value ratio, historical background of performance (proven results), curriculum and availability of facilities. But apart from these, the senior middle school students in China have their motivation grounded in study opportunities overseas. The other segment of potential consumers (age 23 and above) prefer small classes of no more than 15, use of technology, and availability of facilities that are not quite too luxurious to extend of misrepresenting price-value ratio (Sumit, 2005). English Wiz will be introduced at a relatively lower price in order to capture the market. Competitor prices in the China market range from $12 to $30 per lesson (Ludington, 2006). This can be used to guide packages for the English Wiz. However, the Software will not be priced too low in the market as to appear to be relatively inferior or a poor quality product. Price will be reviewed depending on the product’s progress in the market after it is launched and supported through promotion strategies so designed for some specified period say quarterly, monthly, and so on. The Chinese government has not fully liberalized the education sector even after it joined the World Trade Organization (WTO). Because of this, any marketing strategy touching the Education sector should be designed in a way that will not make it appear to be profit oriented, although profit aspect will still be inherently present in the marketing plan since this is the key driver and motivating factor for any foreign investment (Hai, 2000). English Wiz will be marketed more on the strength of its unique all-in-one application software because in the international market, price is usually every one’s tool for competitiveness. Because of this, English Wiz will be committed right from the onset, to attaining ISO compliance standards so as to develop consumer confidence. Since the Chinese market is inclined towards familiarity business culture and strong national pride, English Wiz will consider employing local repair staffs and offering them attractive packages (Khanna, 2010). Place Strategy, and Method of Market Entry In deciding geographic locations to target, the English Wiz will use two types of geographic categories, which are; the first tier cities of China and the second tier cities of China. The first tier cities will comprise of Beijing, Shanghai, Guangzhou, and Shenzhen. The second tier cities will comprise of the coastal cities of Nanjing, Qingdao, Hangzhou, and Dalian; and the inland cities, Chengdu, Wuhan, and Chongqing. The first tier cities enjoy high government support in language training needs. On the other hand, the second tier cities, though characterized by fast economic growth rates, have their language training demands outweighing supply and therefore advocacy by government for language training is relatively higher (Genzberger 1994). These categories have been identified based on existing Canadian language training institutional structures in China and can help guide the English Wiz marketing development in the initial stages of entry but can be subsequently adjusted as appropriate. Below are the statistical channel distributions frameworks set up in China Schools for French language training which can also be used to guide the initial distribution decisions for the Australian English Wiz software. French Language Schools in China—Distribution: Beijing (39) Shanghai (33) Hangzhou (9) Nanjing (6) Guangzhou (6) Tianjin (6) Wuhan (5) Ningbo (5) Chongqing (4) Shenzhen (4) Jinan (3) Chengdu (3) Xi’an (3) Changsha (2) Harbin (2) Dalian (2) Suzhou (2) Nanning (2) Kunming (1) Changchun (1) Zhengzhou (1) Wuxi (1) Hong Kong (1) Source: http://www.edu.cn/English/index.htm Market-entry Considerations During entry into the Chinese market, the English Wiz will be committed to establishing a sustainable brand through consistent brand awareness activities (promotions). English Wiz will also endeavor to establish customer loyalty while demonstrating leadership in the industry through delivering efficient and quality service that meets customer expectations of price-value ratio. Therefore rather than adopt a one-fits-all approach, the English Wiz will prefer use of multi-pronged marketing strategies through building collateral focused on meeting diverse interest groups’ needs (Khanna 2010). The English Wiz will also be marketed through seminars, small demonstration programs, and excursions camps, with aim to counter the consumer assumption that new products have unknown outcomes hence not being suitable. Another important entry strategy for the English Wiz would be to develop and maintain strong media relations which will help in monitoring market trends and competition activity. More of the media marketing activity will be discussed in the promotion strategy in the next section. Promotion Strategy English Wiz will deploy various channels of distribution, many of which are already in use by other companies in the Chinese market. These marketing channels comprises of; promotion and advertising activities through the mainstream media (television, radio, magazines, newspapers and websites), promotion activities based on booths placed in exhibition centres and shopping malls, and through public relations channels like English learning seminars for instance (Madhok,1997). English Wiz Advertising will consist of point of sale materials (posters, brochures, danglers etc), print ads, television commercials and radio programs. Advertising is usually the most expensive promotional choice but is a very significant way of promoting brand awareness for mass and diverse audiences. Although television advertising in China is extremely expensive and fragmented, English Wiz may consider utilizing it based on an assessment of the value it is likely to generate against cost for advertising especially where English language programs are involved (Genzberger 1994). English Wiz will also be marketed through online marketing strategies. However, it should be noted that websites and portals in China are generally relatively noisy and especially due to high traffic that creates an online marketing challenge (Industry Canada 2007). The market segments that can be tapped into using the online marketing approach include young professionals and Chinese students. Use of new technologies such as on-line bulletin and Short message service (SMS), also called “viral marketing” is also a potential marketing channel in the Chinese market which can be utilized by English Wiz to scale up its profile (Khanna 2010). English Wiz will make use of direct marketing which is a relatively cheaper, yet effective approach in delivering materials to the mass audiences while interacting with them directly to share information and feedback. This goes along way to reinforce brand image to the public although it may not always succeed to win the interest of the individuals who have not yet decided (Torrens, 2010). English Wiz will utilize strategic Sponsorships and PR promotion activities. English Wiz will be marketed through targeted sales promotions including; holiday specials, corporate packages, discounted trials, and group discounts. Sponsorships will cover English competitions, and publisher collaboration through issue of coupons containing subscription to English publications. Other promotion activities will include networking done through the Chamber of Commerce and Trade Associations (Torrens, 2010). Another important marketing channel that will be used for English Wiz is Third-party Advocacy. Word of mouth will serve as a powerful tool to appeal to and convince with much ease, the Chinese market to use the English Wiz software. To do this, the plan will incorporate the government of China, Celebrities (Chinese-Australian), and customer testimonials attesting to service satisfaction (Madhok, 1997). Selected Media in China Format Sector Circulation Region Name Print General 600 000 Beijing Beijing Daily Print General 80 000 Beijing Beijing Evening News Print General 300 000 Beijing Beijing Morning Post Print General 150 000 Beijing Beijing Star Daily Print General 860 000 Beijing Beijing Times Print General 1 000000 Beijing Beijing Youth Daily TV General Beijing Beijing Television Print Business 600 000 Chengdu Chengdu Business News Print General 200 000 Chengdu Chengdu Daily Print General 200 000 Chengdu Chengdu Evening News Print General 700 000 Chengdu Huaxi Urban News Print General 200 000 Chengdu Tianfu Morning Paper Radio General Chengdu Sichuan Economic Radio TV General Chengdu Chengdu TV – News TV General Chengdu Sichuan TV Print Business 130 000 Guangzhou Guangdong New Economy Mag’n Print General 1 630 000 Guangzhou Guangzhou Daily Print General 800 000 Guangzhou Nanfang Daily Print General 1 400 000 Guangzhou Nanfang Weekend Print Genera l 600 000 Guangzhou Nanfengchuang Magazine Print General 1 000000 Guangzhou South City News Print General 1 300 000 Guangzhou Yangcheng Evening News Radio General n/a Guangzhou Guangdong Radio, Pearl River Radio General n/a Guangzhou Guangzhou Radio TV General n/a Guangzhou Guangdong TV Online General n/a National Sina.com Print Business 220 000 National Caijing Magazine Print Business 300 000 National China Economic Herald Print Business 300 000 National China Economic Times Print Business 1 100 000 National Economic Daily Print Business 75 000 National Forbes (Chinese Ed.) Print Business 100 000 National Global Entrepreneur Radio General National China Radio International TV General National CCTV 2 Print General 520 000 Shanghai Jiefang Daily Print General 300 000 Shanghai Laodong Daily Print General 150 000 Shanghai Oriental Morning Post Print General 100 000 Shanghai Shanghai Daily Print General 300 000 Shanghai Shanghai Evening Post Print General 250 000 Shanghai Shanghai Morning Post Print General 550 000 Shanghai Wenhui Daily Print General 1 800 000 Shanghai Xinmin Evening News Print General 100 000 Shanghai Xinmin Weekly Print General 310 000 Shanghai Youth Daily TV General Shanghai Dragon TV Source: http://www.edu.cn/English/index.htm Conclusion English Wiz has great potential in the Chinese market. This is because of China being fastest growing economy in the world, and also due to the globalization wave that has made it necessary for the Chinese to learn English as to be suitable for professional career requirements in the International markets. Chinese students who wish to pursue further education overseas too need to learn and sharpen their written English and grammar skills hence provide a further market for the English Wiz software (WTO, 2000). The contemporary world is characterized by fast advancing technological innovation that must be premised upon excellent communication. Through improving the English grammar and writing skills, the English Wiz will help promote effective communication which is relevant for technological innovation both in China and beyond. References Allen, T.J. (1985). Managing the flow of technology, Cambridge MA: MIT Press. Chen, A. (2001). The impact of WTO entry on the changing structure of Chinese industry: A summary assessment. 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